Town Square

New high-speed rail plan has price tag dropping by $30B

Original post made
on Apr 2, 2012

California's proposed high-speed rail system would extend from the Central Valley to the Los Angeles Basin within the next decade and would cost $30 billion less than previous estimates indicated under a new business plan that the agency charged with building the system released Monday morning, April 2.

How did this just drop by 30 billion dollars? Let's see the old plan and the new plan with total cost, including the prospective ridership? I find it hard to believe that the Governor can save 30 Billion dollars-Brown is a politician and his numbers have to be examined. If we accept the numbers, this should be built in stages, if the system goes over budget (each stage) the remaining project should be cancelled.

Yet another dubious cost estimate. I predicted that the originally envisioned system would cost substantially north of $100 billion. All of a sudden, this one is supposed to cost "only" $98-30 or $68 billion? This is not a serious cost estimate AT ALL. It has absolutely no claim to be taken seriously. Where is the $30 billion in savings supposed to come from? Let's see that, hold it up to the light of public scrutiny, and decide if it's credible. After all, they still envisage running HSR up the Peninsula, just delaying when that starts.

If our local politicians sign on to this fiasco -- as Gordon and Simitian appear primed to do -- they should be exiled to political Siberia. I almost had a case of terminal nausea when reading the other day that Kishimoto had emerged to cheerlead for this latest cost fiction/Gov. Moonbeam legacy/generational financial albatross/payday bonanza for the unions, consultants, and construction companies.

CA is already in debt up to its ears, public education is being starved at all levels, and our pols (encouraged by potent special interests) are prepared to sign off on putting us in multiple tens of billions of dollars of additional debt for a project without demonstrated need or viability?! Where's the widespread revulsion at this absurdity?

And some wonder why people become cynical about government-special interest alliances.

It is still $68+ Billion that this state cannot afford right now. And, of course, we all know that a proposed $68 Billion will double by the time all is said and done.

Besides, by the time construction on this rail would be complete, there will be new technologies that are VERY "green" and much more cost effective.

With all of the massive taxation (and alternative/stealth taxation) in this state, California can NOT afford this right now. Voters did NOT approve it...and would not approve it if it were put up to a vote again.

We all know that this will have less proportional ridership than CalTrain does here. So, we are effectively trying to force the state to pay for something that will be used by an elite handful of people.

Again: There are emerging technologies that are coming that will be more beneficial to the environment and much more COST EFFECTIVE.

Why are we going to spend $68+ Billion on a means of transportation that will still be more expensive, more constrictive, less safe and slower than current technology (air travel)? Why are we going to invest so much for such a small corridor that will only be enjoyed by a tiny fraction of the state?

Posted by Don
a resident of Duveneck/St. Francis
on Apr 2, 2012 at 3:12 pm

For HSR to go from San Jose to San Francisco safely there must be significant improvement in the >30 at-grade crossings. Estimates for changes to or elimination of these crossings start at $10 Million each and go up from there. Where is this amount given in the new cost estimate?

Our State is skating on thin ice trying to meet its yearly budget short falls. Adding more debt for a "hope-everthing-will-turn-out-okay" system will not help that. If the idea was economically sound to begin with, the many changes in plans would not have been necessary.

All HSR lines in Spain, France, England, and Japan are subsidized, and they have dense, close together population centers which California does not. Ridership on all public transportation systems is over estimated, see BART and Caltrain. This HSR is no different.

Posted by Paul Losch
a resident of Community Center
on Apr 2, 2012 at 7:22 pmPaul Losch is a registered user.

Bait and switch, bait and switch.

Forget the money for a moment, despite that it still is the elephant in the room.

There are so many other reasons this thing does not make sense. I will not enumerate my previous observations about policy, ridership, local transit users, inter alia. Suffice to say that this thing should be killed without regard to how much it costs: there are plenty of other reasons why it does not make sense.

I find the electrification of CalTrain induucement as another charade. We need the electrification, but not if it is provided by what amounts to a drug dealer--"the first one's free."

There are many fine people who are spending a great deal of time trying to figure out how to put a square peg in a round hole.

Posted by YIMBY
a resident of University South
on Apr 2, 2012 at 8:58 pmYIMBY is a registered user.

Excellent reporting!
Folks - this press conference took place Mon morning and Gennady has his article out by 1pm - and it's the first 'post press conference' article I've seen!

To the first commenter who inquired about costs, "The main driver behind the major cost spike between 2009 and 2011, according to the revised plan, is a greater reliance on tunnels and elevated structures throughout the system. The plan notes that the possible length of elevated structures went up from 77 miles in 2009 to between 113 and 140 miles under the current plan. The length of tunnels, meanwhile, increased from 32 miles to between 44 and 48 miles."

And another commenter correctly noted that the other huge price difference was the "bookend strategy" - now, instead of 4, grade-separated tracks up the Peninsula (and a comparable plan for the LA/Anaheim area), you have a 2-track, 'blended' plan.

But perhaps the key aspect of the new plan, outside of the $30 billion difference is the new "initial operating segment":

".....the rail authority's board Chair Dan Richard emphasized the significance difference between the agency's previous proposal for the system's initial phase and the one laid out in the new business plan.

"Beginning next year, we will begin construction here in the Valley not of a mere track but a fully operational 300-mile electrified operating segment that will connect the valley to the Los Angeles Basin," Richard said.

"This will bring high-speed rail not only to California -- it will bring high-speed rail to America," he said.

It's been said that private funds will only be invested AFTER the train is operating....so HSRA are probably banking on this segment - and using cap & trade funds as well (Web Link)

I think a more accurate way to describe it is "Switch & Bait & Switch Again." We all know that this thing -- like so many California projects -- will spiral out of "control" by "unforeseen circumstances." And, by the time it would be completed, there will be better green sources that render a train obsolete.

There just isn't enough demand (for this particular line), need or money in the state budget for it to be economically cost effective or to justify forcing taxpayers to pay for it at this time.

We didn't vote for this. This need for $68.4 Billion isn't even in the small print. However, by the time this thing is finally put to death, the initial $10 Billion of taxpayer money will be spent on all forms of ridiculous "administrative" and "design" costs.

Posted by common sense
a resident of Midtown
on Apr 3, 2012 at 9:27 am

The headline could just as well be "High Speed Rail projected to be $28 billion over budget".

Governor Brown, who wants to raise taxes in November, otherwise he will cut education & social services. Yet he is willing use the budget to finance High Speed Rail. Governor Brown also wants to shortcut the environmental review process on this project.

Joe Simitian, who has been in the State Assembly & State Senate for 12 years, and is listed as a co-author of the High Speed Rail Bill won't kill this project despite the obvious problems in financing and other operational issues. Simitian is termed out, and needs to find another job, so he is running for County Supervisor. I have my doubts that he would represent us based on his record as a state legislator.

The voters in November should send a message by voting for anyone but Simitian for Supervisor; don't vote for the other enablers either - Rich Gordon or Liz Kniss.

Posted by Paul
a resident of Professorville
on Apr 3, 2012 at 10:09 am

Bernie Madoff has nothing on the High-Speed Rail Authority, they seem cut from the same cloth.

Bernie promised, and seemed to deliver, solid returns over time. HSR is heading down the same track, HSR tells them (the press, public, voters, legislators) what they want to hear. Guess what, HSR is out to get their money.

Eventually, the chickens come home to roost. For the next 150 years, Bernie's perch is federal prison. What are the chances anyone from HSR will ever go to prison, even though their deceit may turn out to be far greater than Bernie's? He only cooked the books for maybe $40 billion. HSR has a much bigger opportunity to disappoint, and to bankrupt California in the process.

The revised 'HSR business plan' is a continuing joke which will soon be discredited by independent experts, just as earlier versions were.

The facts remain:

NONE of the promises made to win the 2008 1A vote are being kept…
- No more than $40 billion to connect San Diego, Los Angeles, Sacramento and San Francisco
- No more than $9.95 billion from state of California
- No money authorized until investors committed
- Los Angeles to San Francisco in 2˝ hours for about $50
- Ridership forecast unrealistically high

Posted by tiredofthis
a resident of another community
on Apr 3, 2012 at 10:30 am

Voters approved a $9 Billion bond for construction of HSR. Estimates of cost to build came in at close to $100 Billion. Now we're supposed to be thrilled with the plan because they've come up with a way to cut potentially $30 Billion??? Call me stupid, but I don't get it! Their plans cannot be trusted at all. No one is being honest here about the cost to the taxpayers, the majority of whom, in light of current state and local fiscal conditions, most likely would not re-approve the first bond proposal.
I'd like to recommend a "do-over" voting opportunity for the tax-paying residents of California.

Posted by The Gravy Train
a resident of Another Palo Alto neighborhood
on Apr 3, 2012 at 11:57 am

A billion here, a billion there. I have no confidence in HSRA's ability to implement this project within any budget. They are a disorganized web of consultants whose primary objective is to keep their gravy train running.

Posted by Richard deSousa
a resident of Menlo Park
on Apr 3, 2012 at 1:02 pm

I don't believe the new estimate! As a former construction inspector the speed with which the new estimate was released guarantees there will be many change orders which will jack the cost more than 30%. Also don't forget we still have to add the cost of interest for the bonds. The governor says he wants to reduce the cost by injecting Cap and Trade revenues generated by industry and businesses. Well, I have news for Jerry, the Cap and Trade market has tanked. The Chicago Carbon Exchange has closed and the EU Carbon Exchange is near collapse because the price of carbon trading has plummeted so the California taxpayers will be on the hook. In the meanwhile our schools and other really necessary programs will continue to suffer. Scuttle the HSR Boondoggle.

Posted by Richard deSousa
a resident of Menlo Park
on Apr 3, 2012 at 4:02 pm

Does the governor and the Democrat legislature think we're stupid??? Cap and Trade will result in the businesses and industry passing the cost to the public followed by a mass exodus of jobs from California.

Let's face it, they have NO IDEA what HSR will cost, none whatsoever. I guarantee you, this latest in a series of ever-revised estimates is a lowball figure. If they say it will cost $70 billion and it winds up costing $150, $200, however many billions when it's finished, they'll simply chalk it up to "cost overruns". No one will go to jail for defrauding the taxpayers or the voters; there is no downside for them. I very much doubt they have done a serious line-item estimate. It sounds to me as if they're conjuring figures out of thin air. This combined with their bribe (inducement) to electrify CalTrain to mollify peninsula residents just smacks of the slimy tactics we have come to expect from CAHSRA. The cost goes up, the cost goes down. They have no clue. They're basically asking for a blank check for whatever amount and it will cost whatever it costs, IMO.

Posted by stewart
a resident of Crescent Park
on Apr 3, 2012 at 9:57 pm

Lets see, the CA HSR Authority has been planning for this fiasco for decades now, a relic of Browns first term as Governor. After all that time, and nearly a billion dollars squandered in consultants, lavish travel, and loads of public relations campaigns that all blew up in their collective faces, this is the latest BEST plan?!

The CA HSR Authority is defined by exemplary arrogance, incredible ignorance, and a clustering of shear incompetence the likes of which Sacramento hasn't seen, and hopefully won't see again, for many many years to come. Almost without exception, every claim in the proposition text, and every statement by the HSR Authority in recent years has been shown to be either simply made up, an extreme exaggeration of reality, or usually an outright lie. How can anyone take them seriously now? Uh, we goofed (again) on our cost estimate, this time it's $30B less!

The state has no funding for schools; k-12 teachers have been sent their notices that their jobs are about to expire, CSU is considering or will simply cancel, enrollments in the future as they can not afford any new students, education costs are soaring through the state. But lo, we have an unlimited supply of billions of dollars for a train to no where, few will ride, that will drain the states treasury for decades to come.

If our so called leaders in Sacramento have not yet figured out that the CA HSR is a rotting lemon that needs to be dumped, the fiscal future of this state is dim indeed. If Brown wants a legacy, fine, but let him spend his money on it, not ours.

Posted by stanhutchings
a resident of Old Palo Alto
on Apr 4, 2012 at 5:18 pm

I just sent yet another plea to stop the HSR to Simitian, Gordon and Brown.
"In a recent release from the HSR,
"Construction of the entire 520-mile rail system will finish in 2028. Six billion dollars in funding has already been identified for the initial segment of the Initial Operating Section, $3.3 billion in Federal stimulus funding and $2.7 billion in Proposition 1A bond proceeds to fund the project through 2017. Cap and trade funds are available, as needed, upon appropriation, as a backstop against federal and local support to complete the initial operating section. No operating subsidy will be required.
The Plan will generate over 100,000 job years of employment over the next five years, the equivalent of 20,000 jobs per year and will provide substantial environmental benefits, eliminating 320 billion vehicle miles traveled over the next 40 years and 3 million tons of carbon emissions annually."
I don't believe the completion in 2028, nor the cost reduction to *only* $69 Billion, nor the jobs estimate, nor the reduction in vehicle miles, nor the carbon emissions reduction. They are all guesses, made using questionable assumptions, no better than the lottery numbers on a Chinese fortune cookie.
Please put a stop to this money pit NOW, before any more of our tax dollars, desperately needed for other things, are spent. Surely $2.7 Billion in CA bonds can be put to a better use! I can think of numerous uses just offhand."
For those interested in stopping the HSR, I asked Simitian and Gordon to host a signing at their office. Info at Web Link on a petition to scrap the HSR.
Personally, I consider the HSR an unaffordable boondoggle that will waste billions of California's tax dollars on a system that is fatally revenue and destination-impaired (it doesn't start or arrive at most places Californians need it to, so will not attract sufficient riders to pay its way). If it's such a great idea, private financing (stocks, bonds, whatever) should suffice. No need for government (tax) funding.

Posted by Kay Djordjevich
a resident of Menlo Park
on Apr 7, 2012 at 5:18 pm

Please tell me what "blended" means. The high speed trains will be using the old CalTrain tracks on the SF peninsula? Is that possible?

The same trains which will run at 200 miles per hour down the valley on new tracks? Furthermore, if these high speed trains run regularly from SF to San Jose, all the street crossings must be changed to keep traffic and trains separate...i.e. grade crossings. So the plan is to build grade crossings for the old tracks, and then eventually, as has always been implied, add the needed set of tracks for the high speed trains. And of course rebuild all the grade crossings?

Or make the grade crossings large enough for 4 tracks to begin with. Imagine this mess at every street crossing the tracks!

How blended? Or do they mean running shuttle trains down the peninsula to San Jose, then changing to board the new High Speed Train? (a reasonable alternative) Then say so!

Otherwise, I don't believe you can run these super fast machines on the old tracks, and alternate high speed trains and commuter trains all day long!

No one has said outright that they mean to run these new "bullet" trains on the old tracks, or what kind of grade crossings are envisioned. They just say it will be blended. How blended?
I wish someone would explain

Don't miss out on the discussion!Sign up to be notified of new comments on this topic.

Email:

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online.
Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information
and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.